Docstoc

Any-Option-Trading-Tutorial-Would-Be-Incomplete-If63 _1_

Document Sample
Any-Option-Trading-Tutorial-Would-Be-Incomplete-If63 _1_ Powered By Docstoc
					       Any option trading tutorial would be
incomplete if it didn't mention a simplistic form
  of options called binary options trading. Not
  too many investors know about this form of
   investment but it is a very hot market right
   now for people not willing to be stuck with
    long holding period investments such as
stocks, bonds, mutual funds, traditional option
  contracts and futures. You may look on the
  web for another option trading tutorial if you
want to know about the more common form of
 contracts trading. This tutorial will focus only
           on binary options trading.




US Binary Option Broker
Binary contracts are, like the name implies, bi-polar Either you choose the
"up" side of the switch, or the "down" side You might think of it similar to any
two-sided choice - yes or no, true or false, heads or tails, on or off
 In this case the binary switch refers to up or down movements in a stock,
currency, or index How it works is that you, or I, or any investor with a binary
options trading account picks one of the available securities to trade (not all
securities are traded
  only the highest volume securities are traded this way) and selects how much
to invest
 Once the amount to invest is selected the investor must choose which
direction the security will go, up (choosing "call") or down (choosing "put") The
trading software computes the payouts (also fixed based on the contract) and
if satisfied with the contact, the investor submits the order
The really fascinating part about this sort of transaction is that it does not
matter how much the stock moves
the only thing that matters is the direction
 The payout at the end of the contract is the same whether the security jumps
a nickel or twenty dollars If the binary options trading contract is for a 75%
payout on an up movement of a security on a $100 investment and the stock is
up even just one cent at US Binary Option Broker the expiration of the option,
the investor receives $175 ($100 invested plus $75 profit)
 Options expire typically hourly so a successful trader can execute many
contracts every day So in summing up this binary trading tutorial: Contracts
have fixed expiration (hourly) - and can't be sold prior (although it is simple
enough to simply make another contract with the same expiration) Trades
require the investor to choose only how much to invest, which security, and
which direction
US Binary Option Broker

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:2
posted:7/25/2012
language:English
pages:10